US-China climate change deal puts heat on India

The United States and China have reached an agreement to limit greenhouse gases with a commitment by China to introduce a cap-and-trade system for its polluting industries.Chidanand Rajghatta | TNN | September 26, 2015, 10:18 IST

WASHINGTON: The United States and China have reached an agreement to limit greenhouse gases with a commitment by China to introduce a cap-and-trade system for its polluting industries. The deal, which will be announced by Presidents Obama and Xi following their meeting today, will put pressure on India to follow suit ahead of Prime Minister Modi’s meeting with the US President in New York on Monday.

Full details of the agreement were not revealed so as to not pre-empt the announcement, but it is understood that China will commit to a national cap-and-trade program starting in 2017 in which specific industries will have an annual limit on emissions.

Under the cap-and-trade system, firms that exceed the limit will be required to purchase credits from those polluting less. China, which is the world's largest overall polluter, in contrast to the US, which is the world worst per capita polluter, will also commit to prioritizing low-carbon and efficient electricity production.

The agreement, which comes amid a raft of other contentious issues surrounding Xi's State visit, will align the two countries closer ahead of the global climate change conference in Paris in December. It builds on earlier commitment by both sides to set steep emissions-reduction targets ahead of the Paris meeting.

The Obama administration also wants India on board by that time and US officials have indicated that the issue will be on top of President Obama's agenda when he meets Modi in New York.

Like China, India is also heavily dependent on coal - and bad coal at that - for much of its energy needs and been reluctant to commit to specific targets to curb emissions, apprehensive that it will cramp economic growth. But a rising criticism of pollution levels in Indian cities, including domestic and international reports that place them at the top of the charts, has strengthened Washington's hands.

There is growing recognition on the Indian side that the old argument about western nations having an economic headstart and being done and dusted with polluting while arresting teh growth of developing nations is not sustainable anymore, even though India is one among the lowest per-capita emitters.

The just-concluded US-India Strategic and Commercial dialogue spoke of both sides signing of a new five year Memorandum of Understanding on Energy Security, Clean Energy and Climate Change and expanding bilateral energy engagement including in the field of renewable energy and energy efficiency, as well as to develop and exchange information on cleaner fossil energy resources such as unconventional oil and gas and carbon capture sequestration.

Initiatives under the US-India Partnership to Advance Clean Energy (PACE) include "Greening the Grid," a $30 million, 5-year initiative to scale up renewable energy integration into India’s power grid, and two activities to promote off-grid clean energy access: the PACEsetter Fund, a joint US $7.9 million fund for innovative off-grid clean energy projects and a new public-private partnership that will work to mobilize US $41 million in finance for clean energy entrepreneurs.

How much all this will result in India committing to specific, targeted emission cuts is not clear yet, but New Delhi can expect plenty of heat from Washington ahead of the Paris meet.